While most of Wall Street focuses on large and mega cap stocks, as they provide a degree of safety and liquidity, many investors are limited in the number of shares they can buy. Many of the biggest public companies, especially the technology giants, trade in the low-to-mid hundreds, all the way up to over $1,000 per share. At those steep prices, it’s pretty hard to get any decent share count leverage.
Many investors, especially more aggressive traders, look at lower-priced stocks as a way to not only make some good money but to get a higher share count. That can really help the decision-making process, especially when you are on to a winner, as you can always sell half and keep half.
We screened our 24/7 Wall St. research database and found five stocks trading under the $5 level that could provide investors with some incredible upside potential. While definitely suited for very aggressive accounts, they could prove exciting additions to portfolios looking for solid alpha potential.
This tiny micro-cap could very well be a solid takeover candidate. Axovant Sciences Ltd. (NASDAQ: AXGT) is a clinical-stage biopharmaceutical company that engages in the acquisition, development and commercialization of novel therapeutics in the fields of neurology and psychiatry. Its therapeutic focuses are Parkinson’s Disease and Lewy body dementia. It operates through the following geographical segments: United States, Switzerland, Bermuda and Other.
The company’s current pipeline of gene therapy candidates targets GM1 gangliosidosis, GM2 gangliosidosis (including Tay-Sachs disease and Sandhoff disease), Parkinson’s disease, oculopharyngeal muscular dystrophy, amyotrophic lateral sclerosis (ALS) and frontotemporal dementia.
Axovant is focused on accelerating product candidates into and through clinical trials with a team of experts in gene therapy development and through external partnerships with leading gene therapy organizations.
Jefferies has a Buy rating and a $3 price target, but the Wall Street consensus target is much higher at $5.17. The shares were trading on Friday’s close at $1.39 apiece.
This stock got hit back in February and could be offering a solid entry point. Inovio Pharmaceuticals Inc. (NASDAQ: INO) is a late-stage biotechnology company that engages in the discovery, development and commercialization of DNA-based immunotherapies and vaccines.
The company focuses on the development of SynCon immunotherapy, which helps break the immune system’s tolerance of cancerous cells, and Cellectra, which facilitates optimized cellular uptake of the SynCon immunotherapies.
Inovio announced last week that its investigational Ebola vaccine was able to elicit a strong antibody response in the majority of subjects in a Phase 1 trial. The vaccine, dubbed INO-4201, was given to 70 subjects either through a skin injection or an injection into the muscle.
Stifel’s Buy rating comes with a $7 price target, which compares with a consensus price target of $10.57. The shares closed at $3.62 on Friday.
Northern Oil and Gas
Sun Trust analysts are very positive on this small-cap energy play. Northern Oil and Gas Inc. (NYSEAMERICAN: NOG) is engaged in the acquisition, exploration, development and production of oil and natural gas properties, primarily in the Bakken and Three Forks formations within the Williston Basin in North Dakota and Montana.
SunTrust pointed out in a recent report that Northern Oil and Gas is the largest non-operator in the Williston Basin. With Bakken returns continuing to improve to well above 50%, and Northern’s operating partners representing what the firm sees as the best operators in the basin, SunTrust sees upside potential to its estimates.
Despite greater difficulty in forecasting production owing to the non-operated business model, Northern should benefit from record well results from operating partners and strong Bakken differentials.
After Northern posted solid results, the SunTrust price target was raised to $5 from $4. The consensus target was last seen at $4.06, and the stock was changing hands at $2.66 on Friday’s close.
This company is working on a diabetes drug and recently had solid clinical data. Opko Health Inc. (NASDAQ: OPK) engages in the provision of health care services. It operates through two segments. The Diagnostics segment comprises clinical laboratory operations that were acquired through the Bio-Reference and point-of-care operations.
The Pharmaceuticals segment includes the pharmaceutical operations acquired in Chile, Mexico, Ireland, Israel and Spain, and the pharmaceutical research and development operations.
The company recently announced positive topline results from a Phase 2 dose escalation trial of OPK88003 to treat type 2 diabetes and obesity. OPK88003 is a once-weekly injectable oxyntomodulin compound with glucagon-like-peptide 1 and glucagon dual agonist activity. Based on this trial data, Opko plans to further evaluate OPK88003 for a Phase 3 clinical program in type 2 diabetes and obesity and potentially for other promising indications, such as nonalcoholic steatohepatitis.
The $5 target price Jefferies has on the Buy-rated stock is not far off the $5.33 consensus estimate. The shares closed trading on Friday at $2.53 apiece.
This small-cap oilfield services play has some big upside potential. Tetra Technologies Inc. (NYSE: TTI) is a diversified oil and gas services company, with the bulk of its revenue derived from drilling and completion fluids, as well as contract compression services by way of its 42% stake in publicly traded CSI Compressco.
Tetra is one of the largest players in the onshore U.S. contract compression arena, where demand is structurally accelerating and the current up-cycle has just reached its “sweet spot.”
Stifel has a whopping $5 price target, but the posted consensus price objective is even higher at $5.23. The stock most recently traded at $2.30 a share.
Five stocks for very aggressive accounts that look to get share count leverage on companies that have sizable upside potential. While not suited for many investors, these are not penny stocks with absolutely no track record or liquidity, and major Wall Street firms have research coverage.